The Alternative Investment Market (AIM) doesn’t have the best reputation. As well as containing a lot of unprofitable businesses that are more likely to fold than expand, AIM stocks can be very volatile. However, I think there are at least a few diamonds in the rough to consider buying.
Tanking share price
Bioventix (LSE: BVXP) is arguably one example. Shares in the developer and commercial supplier of monoclonal antibodies have tumbled over 40% in the last 12 months. While some of this is likely the result of broader market concerns, a lot is surely down to the company overstating revenues by £327,000 as a result of a customer error. In reality, the firm’s actual revenues came in below market expectations.
This news has clearly shaken confidence and pushed the stock down to a multi-year low.
However, I reckon this could be a great time to think about loading up. As worrying as recent form has been, this is still a company that reeks of quality. Margins and returns on capital remain sky-high, thanks in part to having very few employees. While this has led to the shares trading at a premium to the wider market, the current price-to-earnings (P/E) ratio of 16 is already significantly lower than the firm’s five-year average of 27.
Half-year numbers — due on 24 March — will be worth reading. I reckon it will take only a small chink of light to get the shares moving in the right direction again.
Sales down
Another niche AIM-listed company to consider that’s been battered is laser-guided equipment manufacturer Somero Enterprises (LSE: SOM). Its share price has fallen nearly 20% in 2025 already.
So what’s gone wrong here? Well, investors have become increasingly concerned about the general economic outlook, particularly in the US (where the company’s based) which makes up three-quarters of sales. There’s a chance that things will go from bad to worse if interest rates stay higher for longer and force clients to delay purchasing the company’s cement-levelling tech.
Like Bioventix however, this is another small-cap that scores consistently well on quality metrics. Supported by a strong balance sheet and very experienced management, Somero is also a market leader in what it does. Although never guaranteed, the dividend yield currently stands at a meaty 6.8% too.
Monster dividend yield
A final AIM stock that’s worth pondering is base metals producer Central Asia Metals (LSE: CAML). Like the other two mentioned here, its shares have fallen in recent times, down 14% or so in the last 12 months.
Again, much of this appears to be the result of general geopolitical concerns. That said, demand for lead has been lower. The company drills for this (and zinc) at its mine in North Macedonia. It also has copper operations in Kazakhstan.
On a more positive note, the shares now yield an incredible 10% for FY25. Quite whether investors will see all of this cash is open to debate if costs continue to rise. However, the total dividend is expected to be covered by profit as things stand. The stock looks very cheap too, changing hands at a P/E of just seven for FY25.
Full-year numbers are due tomorrow (20 March). It will be interesting to see how current holders react.
This post was originally published on Motley Fool
